[ Nippon Keidanren ] [ Policy ]

Interim Recommendations on Accepting Non-Japanese Workers

-- Bring Dynamism of Diversity into Japan by Opening Doors to Transnational Human Resources --

November 14, 2003

Committee on Industrial Affairs
Committee on Employment
Nippon Keidanren
(Japan Business Federation)


The Nippon Keidanren vision paper, "Japan 2025: Envisioning a Vibrant, Attractive Nation in the 21st Century" was released in January 2003. The paper proposed an approach toward systemic and structural reform based on the fundamental concepts of "dynamism of diversity" and "sympathy and trust" to help restore socioeconomic vitality to Japan. This document seeks to fill in details regarding Japan 2025's immigration proposals.

Postwar Japan parlayed its homogeneous labor force into phenomenal economic development. Increasingly low birthrates and the graying of the population, however, now make it difficult for the country to grow its economy by depending exclusively on the volume of its labor force. Japan's population will start to decrease from the year 2006, inevitably impacting corporate business activities and macroeconomic forces. However, the extent to which the smaller labor force will depress economic growth is forecast at an annual average of only 0.2% of economic growth by fiscal 2025 if more women and aged play larger part in the labor market.

Dampened growth could therefore be more than offset by steady progress in technology innovation. Innovation requires enhanced "value-adding creativity" on the part of Japanese public. It must be possible to link greater creativity to further Japanese economic development by maximizing the contribution of non-Japanese workers within this process. How to make Japan "a vibrant, attractive nation to people around the world," and, as set forth in the Nippon Keidanren's vision paper, one that non-Japanese will "want to visit, to live in, to work in, and to invest in," will be the key to accomplishing this objective.

Global competition has brought increasingly intense competition over skilled workers since the 1990s, and people, as well as goods and money, travel freely across national borders today. Many countries have adopted various approaches to attracting human resources and some have instituted new immigration laws. Since the WTO General Agreement on Trade in Services (GATS), the first multilateral international agreement to regulate the movement of people, came into effect in 1995, subsequent negotiations have accelerated deregulation in this area. Free Trade Agreements (FTAs) and Economic Partnership Agreements (EPAs) are also valuable tools because discussions on deregulating the cross-border movement of people are part of the process in which such agreements are reached. Japan has not, however, taken necessary measures to develop a strategic approach to creating the conditions under which non-Japanese can make full use of their skills in the Japanese workplace. Despite the central government having set a basic policy of promoting non-Japanese workers in specialist and technology fields, practical efforts toward this end have not kept pace. We would like to see the relevant ministries take immediate steps to develop integrated measures designed to ensure the legitimate implementation of this national policy, and to construct the infrastructure required to achieve this goal.

The business community has already recognized the importance of transcultural management. As markets diversify and de-segment, the diversity of a corporation's own work force has become a source of profitability. Spillover potential benefits in the corporate management include increased creativity and tolerance within an organization that help to mitigate problems from arising in the first place as well as enable it to more smoothly resolve problems when they do.

But a diverse workforce does not create itself - the most essential step is to establish a climate in which non-Japanese workers in specialist and technology fields who are attracted by Japan (particularly those highly skilled workers such as researchers, technicians, specialists, and businesspeople), are enabled to make full use of their diverse sets of skills and knowledge. More concretely, research and working climate in universities, government, and private research institutes must be improved; highly functional and transparent personnel systems should be established in corporations and other entities; and international schools and other childhood education, housing, and medical services must be enhanced.

Second, the central government tends to react cautiously in accepting blue-collar non-Japanese workers by holding back until a general public consensus is reached. However, even as Japanese companies shift production bases abroad, certain sectors in Japan will be hit by shortages of Japanese workers, and steps must be taken to ensure that these sectors are able to secure sufficient labor. The agriculture and service industries - particularly the welfare and nursing sectors - are expected to be hard-hit by worker shortages in the future, even if women and senior citizens enter the workforce in huge numbers. It is also true that foreign nationals of Japanese descent who work in manufacturing, service industries and other non-office jobs in Japan struggle to make a decent living. In light of these circumstances, studies aimed at how to better integrate foreign nationals of Japanese descent into Japanese society should be undertaken immediately. Other measures should be undertaken to ensure that unnecessary friction and confusion does not surface when non-Japanese workers eventually enter those sectors suffering from shortages of Japanese workers.

Transparent and stable systems and structures under which non-Japanese are accepted must also be established. A step in this direction would be to steer away from competition between non-Japanese workers and Japanese nationals seeking work by limiting the sectors in which non-Japanese are accepted with a more clearly defined visa status, using bilateral agreements to limit the number of non-Japanese accepted and the countries from which they are accepted, and enforcing so-called "labor market tests." There is also an urgent need for studies designed to determine who will bear the social cost when non-Japanese are accepted into Japan, and in what forms this cost will manifest itself.

To improve competitiveness in Japan, the government must lay down policy measures with a definite timetable. It is also important that the acceptance of non-Japanese be well organized, whether these non-Japanese workers are accepted into specialist and technology sectors or non-office jobs, and progress must be made in reforming the current structures involved in acceptance. Certain parties have recently voiced concern that the acceptance of non-Japanese workers will further aggravate the unemployment for the young. Promoting employment among the young requires a coordinated approach among industry, government and academia to enhancing the occupational skills and increasing business awareness among them, ensuring their capacity to acquire more advanced expertise, techniques and skills so that they are able to find jobs. The absorption of non-Japanese workers should be undertaken in such a manner that co-existence and mutual prosperity between Japan and its neighbors is not impaired.

These interim recommendations are based on the premises outlined above and are meant to suggest basic policy direction by raising issues concerning important pervasive themes. These issues warrant broad and comprehensive discussion, not only among members of the business community, but also among the general public at large. In this sense, these interim recommendations serve to spark deeper public discourse. The final report that will incorporate conclusions on these issues based in part on the public debate is planned for the end of this fiscal year. These recommendations include a list of the issues facing the central government and local government units, as well as corporations, universities, Non-Profit Organizations (NPOs), Non-Governmental Organizations (NGOs) and other groups, with respect to opening Japan up to transnational human resources, specifically in relation to sectors where consensus has been reached on the issue of accepting non-Japanese. It is expected that careful attention be paid to future socioeconomic changes and trends in public opinion in administering the relevant systems, with flexible reevaluations conducted as warranted.

I. Summary of Important Pervasive Issues for Well-Organized Acceptance of Non-Japanese Workers

1. Coordinating Central Government Policy

Non-Japanese nationals are allowed to enter Japan and/or authorized for work or study upon review of their visa status in accordance with the Japanese Immigration Control and Refugee Recognition Act (hereafter referred to as the "Immigration Control Act"). Although a uniform approach on the part of the relevant ministries and local governments on issues involving non-Japanese nationals is advisable, there is no system currently in place to routinely share information, coordinate measures and collaborate in resolving problems.

The revision of the Immigration Control Act in 1990 prompted major expansion in the number of non-Japanese nationals allowed to enter and/or reside in Japan. But an integrated national policy to respond to expanded immigration did not follow. Instead, local governments in areas where non-Japanese reside and work are forced to find patchy solutions to these problems on their own. In addition to systemic problems (lack of social insurance for non-Japanese residents, poor housing, etc) other problems originate with the non-Japanese workers themselves (working in violation of visa status, making insufficient efforts to educate their children and/or learn the Japanese language, etc). Not surprisingly, there is sometimes friction between these workers and the local community.

Under these circumstances, the central government must take a proactive role in steering policies related to the acceptance of non-Japanese in Japan. Specifically, an Office of Non-Japanese Worker Acceptance (provisional title) should be established within the Cabinet. The Office must be charged with drafting and adopting basic policy regarding the acceptance of non-Japanese workers. Concrete measures should also be specified under an integrated and coordinated policy, by which the Ministry of Justice examines and controls the entry of non-Japanese into the country; the Ministry of Foreign Affairs grants visas; the Ministry of Education, Culture, Sports, Science and Technology is involved with Japanese language education for the children of non-Japanese workers; the Ministry of Health, Labour and Welfare is in charge of medical insurance, pensions, and employment status with regard to non-Japanese workers; and the Ministry of Public Management, Home Affairs, Post and Telecommunications provides necessary support for local governments. Perhaps a new government agency should be created, such as an Agency for Non-Japanese Residents or an Agency for Multiculturalism (both are provisional titles) as future steps to establish a uniform policy related to the acceptance of non-Japanese.

2. Governmental and Corporate Roles in Employment Control

Non-Japanese approved for entry into Japan based on the Immigration Control Act are allowed to work or study in Japan depending on their individual visa status. Under the Employment Security Law Enforcement Regulations, corporations and other entities that employ non-Japanese workers are required only to submit collective figures on non-Japanese employed by the company (but not reports on individual non-Japanese workers). For this reason, the central government cannot ascertain an overall picture of the employment of non-Japanese workers, which is connected to illegal entry into Japan.

Two systemic reforms have to go far to ensure an across-the-board acceptance of non-Japanese into Japan: (1) verification of visa status when a company employs a non-Japanese worker; and (2) expansion of the Report on Employment of Non-Japanese Workers, in order to provide the central government with employment information on individual non-Japanese workers at the time they are employed, as well as afterwards.

If enacted, these reforms would constitute a major policy shift in general labor policy with respect to coordinating information on the employment of individual non-Japanese workers, which has to date been carried out solely within the framework of immigration control. Naturally, the information about individual workers provided by companies should be entered into a database strictly protected by the central government, local governments, the Social Insurance Agency, and other public institutions aimed at improving the working and living conditions of non-Japanese workers in Japan.

Legal backdrop must be established on personal information to be collected from non-Japanese workers and companies they work at. For privacy concerns, this issue needs further study.

Double standards in employment - i.e., when non-Japanese workers are subjected to worse labor conditions than Japanese workers or when only non-Japanese workers can be dismissed without reasonable cause, must not be allowed. When employing non-Japanese workers, Japanese companies must, of course, be required to comply with all the same labor laws, including the Labor Standards Law, Minimum Wages Law, and Industrial Safety and Health Law, as they do to employ Japanese workers.

Furthermore, the introduction of a "tax on the employment of non-Japanese," which some advocate for companies that employ non-Japanese workers, should be regarded with extreme caution, since a tax of this type violates basic tax principles of fairness and equity. Some in Japan, however, feel strongly that those who benefit should be the principal bearers of the social costs associated with accepting non-Japanese workers. Concrete measures regarding this issue will be addressed in our final report.

3. Reforming Employment Contracts and Personnel Systems at Japanese Companies

The central government has introduced the Ninth Basic Plan for Employment Measures (1999), and the Second Basic Plan for Immigration Control (2000), as part of its efforts to set policies for promoting acceptance of non-Japanese workers in specialist and technology sectors. But the approach to greater utilization of non-Japanese workers should not be limited solely to improvements in the immigration system. Work on this issue must also focus on corporate reform in the areas of labor management and personnel systems, since removing the barriers that make it difficult for non-Japanese to work at Japanese companies will help Japanese people as much as non-Japanese workers.

(1) Creating Transcultural Synergy in Management

Diversity management has become an indispensable element of corporate governance in today's business world. Defined as "a set of strategies for maximizing the contribution of diverse human resources," diversity management is not concerned with conventional corporate or social standards, but aims for an immediate and flexible approach to the changing business climate. Incorporating diverse attributes (genders, ages, nationalities, etc.), values and ideas allows an organization to achieve corporate growth and to realize the full potential of individual employees. This type of corporate management maximizes the contribution of cultural diversity, and as such is also sometimes referred to as "transcultural management."

Diversity naturally impacts the efficiency of organizational management in a variety of ways. It could weaken the sense of unity within an organization, and may require extra time and work before decisions can be reached. But diversity also brings the positive effects of "transcultural synergy" to an organization in which members recognize their mutual differences without passing judgment as to the value of those differences. Creatively combining disparate approaches improves organizational management methods and ways of getting the job done. Conventional theories of cross-cultural management have focused on the differences between the cultures of individual countries with the principal aim of ensuring smooth management through deeper understanding of cultural differences and diversity in corporate response. As globalization increasingly takes hold, however, companies must respond immediately and on a global scale to meet market needs, and deliberately highlighting differences is not what is needed in these circumstances. Corporate management must stand on a foundation of universal business values and merge the differences between individuals - it must, in other words, transcend culture. Transcultural management takes business to a new plane, and Japanese companies must look to maximizing the contribution of non-Japanese workers in this context.

(2) Considerations in Accepting Non-Japanese Workers

According to a recent Nippon Keidanren survey on accepting non-Japanese workers into Japan, the issues concerning the utilization of non-Japanese workers within the corporate system most often cited by companies with experience in employing non-Japanese workers are "differences of culture and custom" (42.1%) and "communication in the workplace" (41.5%). Some respondents cited "no need to employ non-Japanese workers," and "operating a business of customer relations, so that language and cultural differences would be critical," as reasons for not utilizing non-Japanese workers. This indicates that some companies are concerned about problems that could arise after a worker is employed. The most common response to questions about measures that the company needs to take before accepting non-Japanese workers is "changing corporate and employee mindset" (44.9%). Typical in this respect is the following response. "It's not just a matter of the corporate system; it's the corporate cultural mindset. An attitude of exclusivity that's ill-suited to a global age is the problem." Survey findings suggest that culture, language, and mindset are issues that Japanese companies must address if they are to maximize the contribution of non-Japanese workers.

In tandem with changing corporate and employee culture and mindset, Japanese companies also need to develop a framework for effectively and appropriately utilizing non-Japanese workers at a reasonable cost if they are to maximize the contribution of non-Japanese workers. It is essential that non-Japanese workers feel that the duties they perform, and the compensation they receive, are adequate.

Japanese companies have recently begun to reassess the traditional seniority system and to introduce performance-based job assessments. Greater diversity in the forms of employment available in Japan is also likely in the future. Non-Japanese workers want to choose for themselves which of the diverse forms of employment available best suits their individual situation, and lay out clear plans for a career path accordingly. Even those who plan to stay in Japan for only a short time are keenly aware of the need to figure out what they will do within that timeframe and determine their next steps. For non-Japanese who take this purposeful approach to work, the career paths available to them at a Japanese company would appear extremely murky.

Most Japanese companies compensate highly skilled contracted non-Japanese workers at international labor market prices. The wage gap at Japanese companies, however, between management and specialists on the one hand, and manufacturing staff on the other, is narrow, as is the difference between job grades. Compensation standards at Japanese companies are unlikely to attract exceptional overseas human resources for a certain length of time and subject to the same working conditions as the Japanese at the company. Global competition for top-rate human resources is becoming fiercer, and even companies in other East Asian countries offer higher salaries for highly competent workers. Japanese companies must take steps in a variety of areas to make it easier to fully utilize non-Japanese workers.

Non-Japanese employees also require additional care, including assistance with the tasks of day-to-day life. In addition to providing Japanese language classes on weekday evenings, companies that employ non-Japanese workers should support them in a variety of ways - for example, foreign employees who have lived in Japan for many years could act as counselors for newcomers, a general assistant in each workplace could be designated to provide more detailed assistance for newcomers, and whenever possible, they could be assigned bosses who have experience working overseas.

To maximize the contribution of non-Japanese workers, it is also important that a framework for strict compliance and confidentiality be developed. In the Nippon Keidanren survey, respondents cited "transmission of the company's unique technologies overseas" and "leaking of classified information" as sources of concern. Companies must pay close attention to even the smallest details when drawing up employment contracts for non-Japanese workers.

The points for consideration outlined here can be viewed as the international values of the management environment in which Japanese companies operate. If Japanese companies are to take these values as their base, blending in their own particular corporate culture to achieve transcultural synergy, the corporate mindset must be changed and, at the same, the schemes and systems to accomplish this developed.

4. Resolving Issues Associated with Foreign Nationals of Japanese Descent Entering and Working in Japan

Under the current immigration system, foreign nationals of Japanese descent are granted visas specific to their ethnicity and situation as a Spouse or Child of a Japanese national (mainly second generation Japanese) or Permanent Resident (mainly third generation Japanese). These visas are not contingent on employment contracts with companies and other entities, as is the case with visas issued to foreign nationals not of Japanese descent. The latter are not allowed to remain in Japan without employment if they leave their jobs after having signed an employment contract as the basis on which their visa was granted, nor are they allowed to take jobs involving activities other than those designated by their visa status at the time they entered Japan. Foreign nationals of Japanese descent, however, given their ethnicity and situation, are not in the strictest sense treated as non-Japanese, and are therefore able to enter and reside in Japan much more freely than foreign nationals not of Japanese descent. For this reason, in not a few cases, foreign nationals of Japanese descent enter Japan without prospects for gaining a livelihood once they are in the country, and without being fully prepared for life in Japan. As a result, many of these people end up in harsh living and working conditions.

Needless to say, foreign nationals of Japanese descent already play a substantial role in supporting the Japanese economy. The foundation for their livelihood in Japan, however, has been rocked by the prolonged stagnation of the Japanese economy. Given these conditions, easy entry and residence in Japan is not necessarily in the best interests of foreign nationals of Japanese descent or their families. A reliable work situation and the steady income it provides are necessary to building a sound financial base for their lives. With this in mind, it is recommended that modes for restructuring the current visa system be studied. Possible reforms include stipulating in principle that foreign nationals of Japanese descent wishing to enter Japan in the future be required to have a signed employment contract with a company or other entity, and that visas be granted only to applicants with sources of steady income in Japan. With regard to foreign nationals of Japanese descent who have already entered and reside in Japan, it is recommended that measures to be implemented at the time of their visa renewal include mechanisms for verifying that they have passed the Japanese Language Proficiency Test, are covered by social insurance policies, and have enrolled their children in school.

Finally, the new framework proposed in section 2. above (Governmental and Corporate Roles in Employment Control) must also be applied to foreign nationals of Japanese descent.

5. Improving Living Standards of Non-Japanese

It is essential to promote non-Japanese workers' understanding of Japan's social systems and structures. The central and local governments must jointly lead the way in making the systems more welcoming to non-Japanese workers.

(1) Enhancing Childhood Education

A number of the non-Japanese granted entry visas and work permits bring children with them to live in Japan. International schools and non-Japanese schools offer children the benefit of an education in their native language. These schools, whether licensed or unlicensed, however, are entitled to subsidies only on an extremely limited basis, which makes tuition fees high and keeps the number of these schools in Japan low. Classes in Japanese public schools are of course conducted in Japanese, a situation that puts pressure on non-Japanese children to learn the language, and some non-Japanese children have experienced a decline in their academic performance or refuse to attend school altogether. Some local governments in areas with large concentrations of non-Japanese reside have introduced measures designed to counter these situations. Steps include establishing classrooms in elementary schools called "preschools," where children learn the Japanese language and are taught day-to-day life and customs in Japan, as well as rotating Japanese language teachers, counselors, and interpreters among non-Japanese families living in the school district. Some local governments have also introduced orientations and exchanges for students' guardians to promote an understanding of the Japanese school system.

Local governments must, however, find ways to meet the expense involved in implementing these measures on their own. The subsidies provided by the central government to cover salaries for supplemental teachers, interpreters, counselors, and other staffers are particularly low. It is recommended that national subsidies be made available to local governments in communities with large concentrations of non-Japanese residents, and particularly to those local governments that are taking a progressive approach to resolving these challenges.

Most importantly, Japanese compulsory education is not being enforced among non-Japanese, which has created a problem of low school attendance rates among non-Japanese children, particularly those of foreign nationals of Japanese descent. Rise in school absence increases as students reach junior high and senior high school age, creating fertile ground for delinquency. Truancy is not only a matter for local governments and public schools; local NPOs, NGOs and other groups must work together to promote a better understanding of childhood education among non-Japanese guardians for the sake of both the children and the local communities. The issue of requiring non-Japanese guardians by law to send elementary and junior high school age children to school must be studied carefully. However, it is recommended to under the Immigration Control Act, non-Japanese applying for a visa must specify which educational institution their children will attend, and those applying for visa renewal show evidence of their children's regular school attendance.

(2) Improving Housing

The most immediate problem facing non-Japanese who have been granted visa status, secured employment and entered Japan, is finding a place to live. While those working at companies that provide corporate housing or act as agent and guarantor to secure private housing do not face major difficulties, non-Japanese who try to secure housing on their own consistently run into a brick wall.

The former Ministry of Construction circulated a memo to all prefecture governments in 1992 stipulating that non-Japanese with permanent residence status and foreign registration cards be treated the same as Japanese nationals with regard to public housing. The result was an increase in the number of non-Japanese in government-run housing beginning in the latter half of the 1990s. But non-Japanese applicants seeking private rentals are in many cases still refused, and this group has a difficult time finding a place to live in Japan. The majority of non-Japanese residing in cities with large concentrations of non-Japanese live in government-run housing, accounting for 20-40% of all residents in some of these housing complexes, and conflicts between non-Japanese residents and the local community are not rare.

Resolving these problems requires that local governments step in, and some governments are in fact working on measures to address this issue. Specifically, the "system for assisting non-Japanese in securing housing" that has been introduced in the city of Kawasaki is an especially noteworthy attempt to eliminate the discriminatory treatment non-Japanese face in renting private housing. In most cases, non-Japanese are required to have a Japanese guarantor before they can move into private rentals, and this type of measure establishes a local government-based "guarantee system" to assist non-Japanese who are unable to find a guarantor on their own by vouchsafing for any loss or damage that may be inflicted on the property. The benefits this system provides are still not widely known, because so few non-Japanese have taken advantage of it and most local governments have yet to introduce a similar such system. Despite these unresolved issues, however, it is recommended that efforts be made to expand this system nationwide.

(3) Improving and Enhancing the Social Security System

Non-Japanese who work in Japan are typically dissatisfied with the medical and other types of social insurance available to them. Japan ratified the Convention Relating to the Status of Refugees in 1982, and the contingent revision to domestic laws opened the national pension system, child allowances and childcare allowances to non-Japanese. Coverage in the national health insurance system was also approved for all non-Japanese in 1986.

But the pension and health insurance systems do not necessarily function effectively for non-Japanese. Actual rates for health insurance coverage for non-Japanese in Toyota, a city with a large concentration of non-Japanese residents, are 8.0% for "government-managed health insurance," and 46.9% for "national health insurance," with 45.1% having "no coverage" at all (as of the end of December 2000; the health insurance and no coverage numbers are estimates). This leaves a little less than half of non-Japanese without health insurance (some among the 45.1% of non-Japanese who fall into the "no coverage" category subscribe to private insurance.). In this context, the social insurance sector is confronted with a myriad of problems - an increasing number of people with no medical insurance coverage and the resultant health problems among non-Japanese residents, problems caused by expensive medical bills going unpaid, and a lack of medical interpretation services at medical facilities, as well as the disparity among local governments in the ways the national health insurance system is managed and subscribers defaulting on insurance premium payments.

Designed specifically to meet the needs of workers employed for long-term, the Japanese social insurance system does not accommodate the realities faced by non-Japanese who do not plan to stay in Japan as permanent residents. Moreover, the large percentage of non-Japanese without social insurance coverage can be attributed in part to the fact that the majority of this group moves repeatedly from one short-term job to another. The Japanese pension system was restructured to allow non-Japanese who have paid into the system for at least six months and subsequently terminate their residence in Japan to receive a lump-sum reimbursement if a claim is filed within two years of withdrawing from the national pension system. However, subscribers who have paid into the pension system for at least 36 months end up paying more in pension premiums than they receive in reimbursement, since reimbursement has a ceiling. As a result, non-Japanese may be reluctant to subscribe to a pension system that, for them, is nearly the equivalent of term insurance, and refrain from subscribing to national health insurance, which is managed with the pension system as a single set.

Under the national health insurance system, only those non-Japanese whose visas permit a period of stay of at least one year, or whose purpose of entry into Japan and lifestyle indicates to insurers that they are likely to stay in Japan for at least one year (even if their visas permit a period of stay of less than one year), are required to subscribe to national health insurance. Under the Law for the Treatment of Sick or Deceased Travelers, emergency medical treatment is provided within a narrow scope, and Gunma Prefecture was the first of the local governments to partially compensate unpaid medical expenses for non-Japanese in 1993. A national system for the compensation of unpaid emergency medical expenses for non-Japanese was introduced in 1996, though compensation is limited to designated hospitals (emergency and critical care centers).

Though systemic reforms to both the pension and medical care systems are currently on the table, in neither case do the reforms under review focus on accepting non-Japanese. Specific recommendations from this perspective include reassessing the principle of simultaneous coverage under the health insurance and pension systems, authorizing national health insurance coverage for non-Japanese employees not covered by a company's health insurance plan, establishing a system of public support for emergency medical expenses, and reevaluating the lump-sum reimbursement scheme for non-Japanese upon withdrawal from the pension system. Conclusions on these recommendations will be drawn in our final report.

(4) Provision of Public Services and Participation in Local Government

The primary obstacle faced by administrators in providing public services to non-Japanese is the language barrier. In addition to assigning civil servants to administer to non-Japanese and translating government pamphlets, local governments of cities with large concentrations of non-Japanese residents also provide greater opportunities for permanent residents of Japanese descent and other non-Japanese who do not speak the language to learn Japanese. It is recommended that national financial assistance for local governments be increased to offset the expenses involved in providing these services.

Participation by non-Japanese in local government is another major issue that must be addressed. Although the Bill for Granting Foreign Permanent Residence in Japan the Right to Vote in Local Elections was submitted to the Diet in 2000 (submitted by New Komeito, the Democratic Party of Japan, and the New Conservative Party), this bill is still under deliberation. Since the beginning of the 1990s, assemblies of prominent non-Japanese residents have been formed at the local level. Of these, the Kawasaki City Representative Assembly for Foreign Residents (established in December 1996) is an example of a local assembly based on an ordinance created by a city council resolution. The Kawasaki assembly has the right to inquire into municipal administration and its proposals are incorporated into municipal administrative practices and ordinances (Adopted proposals include an increase in the welfare allowance for non-Japanese elderly, and the dispatch of cross-cultural communication teachers to public schools). Local governments throughout Japan must learn from these progressive measures under advisement and take steps to incorporate the opinions of non-Japanese in local administration.

6. Strengthening Measures on Illegal Residents and Public Security

As of January 1, 2003, the number of illegal residents as a result of visa overstay stood at over 220,000, a 4,000-person decrease from the time of the previous survey (January 1, 2002), and a decline of some 78,000 from the record high posted in the May 1, 1993 survey. The fact, however, that as many as 220,000 of the more than 700,000 job-seeking non-Japanese have overstayed their visas presents a serious problem.

It should be noted that some 8,400 (more than 50%) of the more than 16,000 non-Japanese in Japan arrested in 2002 were found to be illegal residents as a result of visa overstay.

In recent years, the increase in murder and other heinous crimes committed in Japan has contrasted with a dramatic drop in the rate of arrest of perpetrators of these types of crime. This significant decline is attributed to, among other factors, an insufficient number of police officers facing continually increasing crime, and is further aggravated by a rising average age among police officers (41.9 years nationwide, 42.1 years in Tokyo).

Given these conditions, strong measures to ensure public security are a matter of great urgency. Greater public security is not only desirable for the Japanese public, but also for non-Japanese who live and work in Japan. If Japanese people view the non-Japanese who are serious about their work and studies in Japan coldly, and mutual suspicions between Japanese and non-Japanese intensify, the conditions conducive to "dynamism of diversity" and "sympathy and trust" will not materialize. Both the central and local governments must make this issue their top priority.

It was in this context that in July 2003 the Liberal Democratic Party (LDP) drew up its Urgent Proposals aimed to "extricate Japan from its current critical security situation within five years." In addition to calling for increase in police officers, Immigration Bureau, Coast Guard, and prison staff, and expanding capacity at such security-related facilities as detention cells, prisons, and immigration control facilities, the proposals has specific numerical targets for "reducing the number of illegal non-Japanese residents in Japan over the next five years." The Democratic Party has also proposed an increase in the number of police officers by 30,000 in the next four years.

Although we support the basic direction of these proposals, without routine information-sharing and policy coordination among the relevant ministries and local governments, working and living condition for non-Japanese in Japan could deteriorate further, pushing greater numbers among this group toward crime. It is essential to promote uniform and coordinated measures taken by central and local governments in accepting non-Japanese in Japan, together with stronger security measures and efforts proposed to prevent illegal entry into Japan through increased numbers of police officers, enhanced immigration control facilities, and increased numbers of immigration officers.

II. Specific Proposals on Sectors/Areas for Expanding and Facilitating Acceptance

1. Facilitating Acceptance in Specialist and Technology Sectors

(1) Current Position

In the Ninth Basic Plan for Employment Measures (1999) and the Second Basic Plan for Immigration Control (2000), the central government called for "actively promoting the acceptance of non-Japanese workers in specialist and technology sectors in order to revitalize and internationalize the Japanese economy."

The visa status for specialist and technology sectors include 14 of the 16 activities in which visa holders are authorized to engage (diplomats and government officials are excluded), as listed in Annexed Table I(1) and I(2) of Article 2 of the Immigration Control Act (The 14 authorized activities in specialist and technology sectors include: professor, artist, preacher, journalist, investor/entrepreneur, lawyer/accountant, doctor/dentist, researcher, instructor, engineer, specialist in humanities/international services, intra-company transferee, entertainer, and skilled labor).

In the face of global competition for securing the most advanced experts and specialists, the need for human resources in 13 of the 14 categories (excluding entertainers) is mounting, primarily for those companies developing international businesses. But the total number of people entering Japan with visas authorizing them to engage in these 13 activity categories accounts for merely 0.02% of the total non-Japanese resident population (21,775 persons in 2002), and even this number has been falling. This situation is decisively disadvantageous for Japan, as it tries to reinforce its international competitiveness by putting together a highly skilled workforce.

Concrete measures designed to facilitate the acceptance of non-Japanese workers in specialist and technology sectors must be devised in order to respond to the growing needs of companies, and socioeconomic revitalization based on the "dynamism of diversity."

(2) Proposals for Problem-Solving Measures

As described above, national policy in Japan calls for promoting the acceptance of non-Japanese workers in specialist and technology sectors. Moreover, many Japanese companies are working to maximize the contributions of non-Japanese workers to the array of transnational business ventures they are pursuing as the economic arena becomes more globalized. Ensuring that highly qualified human resources are able to quickly and smoothly enter Japan and immediately fill their positions is imperative to the success of these projects. From this standpoint, many aspects of the systems currently in place must be improved. Nippon Keidanren member companies often express opinions such as these in hearings and surveys. Following are proposals that the central government must:

1) Expand visa status categories

Eligibility for several categories of visa status should be more broadly defined, and a wider range of applicants should be accepted to practice in fields for which certification specific to Japan is required.

Eligibility for engineers
Delete the requirement for all industries that the applicant "be a graduate of university, or have completed the equivalent or higher level of education, or have at least ten years' experience in the field" for authorization to engage in the activities described in the Engineer category in the Ministerial Ordinance of Standards for Article 7-1, Paragraph 2 of the Immigration Control Act (hereafter referred to as "the Ordinance"). This requirement is being eased for information processing technicians/information processors who have passed information processing examinations or are certified in the field. The easing of this requirement should be expanded to all industries.

Eligibility for specialists in humanities/international services
Revise the requirement of "at least ten years" experience in the field stipulated for non-university graduates to "at least four years'" for authorization to engage in the activities described in the Specialist in Humanities/International Services category of the Ordinance. Graduation from a university ordinarily takes four years, and an equivalent number of years experience in the field should be a sufficient requirement.

Eligibility for intra-company transferees
Revise the requirement of "at least one year continuous" work at the headquarters or a branch or other office outside of Japan immediately prior to the transfer for which the application is submitted, to "at least one month continuous" work for authorization to engage in the activities described in the Intra-Company Transferee category of the Ordinance. One year or more is too long a period of time for those transferred from outside of Japan who wish to get started in their new position (or who wish to begin working in Japan in the case of a non-Japanese worker) as soon as they have tied up loose ends and studied the Japanese language (approximately one month).

Eligibility for investors
Delete the requirement that investors "engage at least two persons residing in Japan" for authorization to engage in activities described in the Investor/Entrepreneur category of the Ordinance. Regulations should allow for the acceptance of non-Japanese whose investments will contribute to the revitalization of the Japanese economy, even if they do not engage at least two residents of Japan.

Broader scope of acceptance in fields for which certification specific to Japan is required
Requirements are extremely strict with regard to Legal/Accounting residence status for lawyers and certified public accountants, and to Medical Services residence status for doctors and dentists. Authorization to engage in these activities (to practice in fields for which certification specific to Japan is required), with the exception of lawyers at foreign law offices and non-Japanese certified public accountants in the case of Legal/Accounting residence status, requires that practitioners be recognized as certified under Japanese law. Certification requirements should be eased to authorize visa status (for entry, residence, and work) for lawyers, certified public accountants, doctors and dentists whose certification is, for example, recognized by the U.S., members of the EU, and other developed nations, nations with which Japan has signed economic partnership agreements, and other Asian nations.

Globalization of corporate activities means a greater need for lawyers and certified public accountants from a number of different countries. While certain business practices are currently permitted under the Special Measures Law Concerning the Treatment of Legal Practice by Foreign Lawyers, and Article 16-2 of the Certified Public Accountant Law, the scope of authorized practices is limited. In the case of doctors and dentists, the skills of non-Japanese specialists can be utilized, provided they learn enough Japanese so that language does not impede communication in the workplace.

The Council for Regulatory Reform has already noted this issue at the national level, and reevaluation of granting visa status from the perspective of improving the convenience of daily life for the general public and revitalizing competition with regard to service in these fields is currently underway. The scope of authorized practices is being reassessed, as is the system as a whole in terms of bilateral recognition of equivalent certifications and the elimination of certain types of required certification.

2) Extend Period of Stay

Extending maximum period of stay to five years
Currently, the period of stay for any residence status other than that of diplomat, official or permanent resident may not exceed three years (Article 2-2, Paragraph 3 of the Immigration Control Act). The maximum period of allowable stay should be extended to five years. In Germany and the U.K., for example, the maximum period of stay granted is five years, while in France it is ten. The period of stay in Japan was already extended when it was revised in October 1999. Subsequent changes in the international business environment, however, warrant further extension.

Subdividing period of stay categories/liberalizing choice of category
Under the ordinance, the period of stay categories permitted for 13 of the 14 residence status (excluding "entertainer" status) are three years or one year (The period of stay categories for entertainers are one year, six months, or three months). Again, the maximum permitted stay should be extended to five years, and at the same time, more period of stay categories should be created that are narrower in scope - five years, four years, three years, two years, or one year. Non-Japanese applying for a certificate of visa eligibility should be able to choose from among these different period of stay categories the one best suited to the work in which they will be engaged. These changes will provide greater transparency in the standards applied in authorizing periods of stay, and also grant non-Japanese applicants greater flexibility.

Coordinating period of stay with term of limited employment contracts
At present, some Japanese companies annually renew one-year work permits for employees, as well as one-year employment contracts, as directed by immigration authorities. Non-Japanese workers have their own clearly defined career paths in mind, and are constantly aware of the three or five years they plan to work at a Japanese company and the type of work they hope to accomplish within that timeframe. Even if the maximum period of stay is extended as recommended above, Japanese companies will be unable to attract highly skilled non-Japanese workers with expert knowledge if they are forced to limit employment contracts to a one-year term. The outcome of the reevaluation of the period of stay for visa status must be coordinated with the terms of limited employment contracts. The one-year (three years for highly skilled workers with expert knowledge) term for limited employment contracts under the current Labor Standards Law will be revised to three years (five years in the case of highly skilled workers) in January 2004. This revision will allow the period of stay to be extended to the same three-year term as limited employment contracts. Extending the maximum period of stay to five years will require the requisites for residence status under the Immigration Control Act, and the requisites for applicants with advanced skills and expert knowledge under the Revised Labor Standards Law, to be revised accordingly.

3) Provide Greater Clarity in Reasons for Application Rejection

The Minister of Justice screens non-Japanese applying to enter Japan on residence status other than short-term stays for visa status eligibility and compliance with standards, granting certificates of eligibility only in approved cases. But no document specifying the reasons for rejection is provided when a visa application is refused. Providing greater clarity as to the reasons an application is rejected by ministerial ordinance or public notification would also serve to eliminate doubts about inconsistency among individual immigration officials in the application of standards.

This revision also requires the utmost consideration of the issue of civil rights (the right to privacy). In clarifying the specific screening standards applied, for example, only information regarding an applicant's visa status eligibility should be made public. In this way, greater transparency will be afforded in immigration control practices and applicants will also be able to more fully prepare for the visa application process.

4) Simplify and Accelerate Visa Issuance Procedures

Non-Japanese wishing to enter Japan are allowed to enter, reside and/or work in Japan only after their application, submitted by the applicant or proxy, has been screened and approved as described above and a certificate of eligibility granted, the certificate of eligibility presented at a Japanese embassy or consulate, and a visa/landing permission issued. The application process for a certificate of eligibility requires an application form, as well as documents that are specific to each visa status category. Certain visa statuses require a large number of documents and involve complex methods for filling in complicated information details, and the burden of this procedure falls mainly to notary publics and the institutions accepting the applicant. Requirements for the submission of unnecessary documents should be eliminated, and documents should be redesigned so the general public can easily fill them out.

The length of time involved in document screening at the Ministry of Justice Immigration Bureau has been cited as a problem. While the time required varies according to the specific application, screening procedures average two to three months, and may require up to half a year in certain cases. This amount of time is excessive from the standpoint of companies that wish to bring in outstanding non-Japanese workers in as timely a manner as possible to begin work on projects. The execution of application screening is excluded from Administrative Procedures Law, and moreover no target timeframe has been set with regard to screening. The trouble and cost involved in these complex procedures are major impediments to companies developing business projects in which time is of the essence, and dealing with these complex procedures has forced some companies to abandon the idea of bringing in non-Japanese workers. Simplifying these procedures would allow non-Japanese to handle the application process themselves.

Additionally, a blue-ribbon status system could be established for companies that have, for example, submitted no inadmissible visa applications over the past several years, and for which there have been no incidents involving non-Japanese workers granted residence status with permission to work for them. Applications for certificates of eligibility for non-Japanese filed by proxy by companies with blue-ribbon status would be given priority for quicker, simplified screening and approval procedures.

Britain, for instance, has introduced an electronic application system under which 70% of applications are processed one day after they are received, and 90% are processed within a week of receipt.

5) Request Prompt Conclusion of Social Security Agreements

Concluding social security agreements with countries whose nationals are often involved in human resource exchange with Japan is also extremely important in attracting the best resources to Japan from overseas. To date, Japan has concluded agreements with only two countries, Germany (effective as of 2000) and the U.K. (effective as of 2001).

While the recent achievement of substantial agreements through negotiations with the U.S. and South Korea is commendable, it is recommended that Japan's next goal be to conclude agreements with nations with well-developed social security systems. Agreements with nations currently negotiating with Japan (France and Belgium), nations with which negotiations have been proposed (the Netherlands, Italy, Luxemburg, Canada, and Australia), and other priority nations (countries in Asia) provide a particularly strong incentive for foreign capital firms to bring superior human resources into Japan.

6) Study the Possibility of a System to Promote the Long-term Residency of Highly Skilled Workers

In order to ensure that non-Japanese workers in specialist and technology sectors are able to maximize display of their skills, Japan must provide a climate in which these workers are able to chart long-term career paths. In Britain, for example, the Highly Skilled Migrant Programme (HSMP) introduced in January 2002 was instituted to accept a greater range of experts in science, finance, and other fields. Applicants scoring at least 75 points under the HSMP points scoring program are permitted to reside in the U.K. for one year even without a job offer on the table, and this period of residency may be further extended for an additional three years. After working as a highly skilled worker for a total of four years, individuals may apply for permanent residency.

The acceptance of researchers and other exceptionally skilled non-Japanese workers in specialist and technology sectors, and the promotion of permanent residence, has already become a major global trend. Studies on ways to establish these schemes and systems in Japan are needed.

2. Expansion of Acceptance of Non-Japanese Students and Promoting Their Employment in Japan

(1) Expanding Acceptance of Non-Japanese Students
1) Significance of Accepting Non-Japanese Students and National Policy

The acceptance of non-Japanese students contributes significantly to Japan in a variety of ways. It promotes international understanding, creates a network of internationally minded people, makes an intellectual contribution to the international community, and reinforces the country's global competitiveness by maintaining and raising scientific research standards. Japan is moving forward with accepting non-Japanese students based on the national Plan to Accept 100,000 Non-Japanese Students (1983). Over the past four years, the number of non-Japanese students in Japan, primarily from China and other Asian countries, has doubled, and the targets set forth under this plan were met in 2003. However, the percentage of non-Japanese students studying at Japanese institutions of higher education is still dramatically lower than in the U.S., U.K., Germany, France, Australia, and other countries.

2) Expand Quantity and Ensure Quality

Given the significant impacts of accepting non-Japanese students, continued expansion in the "quantity" of non-Japanese students must be balanced in the future with ensuring the "quality" of those students. The rising number of non-Japanese coming to Japan ostensibly as students, but in reality to find jobs, and the fact that certain segments of this group engage in work not permitted by their visa status or become involved in crime, has become a public irritant. Universities must apply stricter standards at the time students are selected for admittance, and thoroughly account for the registration of students who have been admitted. The most important elements in ensuring both quantity and quality in accepting non-Japanese students is creating numerous internationally competitive universities, an undertaking that would also benefit Japanese university students. The following proposals are specific means toward this end:

Creating university educational programs that attract students
Offering university programs that compete at the international level in terms of quality and appeal so that non-Japanese students will want to spend their precious university years in Japan is of paramount importance. Reassessment of educational programs must address international applicability with regard, among other factors, to developing university faculties that are distinguished in both national and international circles, and expanding the scope of lectures given in English, an integral part of the global communications infrastructure. It is expected that each university to take an original approach to this issue tailored to its own institution.

Additionally, information on the educational programs offered by individual universities must be made widely available overseas. Toward this end, more extensive orientations on studying Japanese could be sponsored by Japanese diplomatic offices overseas, and a more aggressive approach could be taken to the dissemination of information with the Ministry of Foreign Affairs, the Ministry of Education, Sports, Science and Technology, and other relevant institutions working in partnership on a website on the subject of studying in Japan.

Non-Japanese students who return to their home countries after studying in Japan are a valuable human resource for building bridges between Japan and these countries in the political, economic and other arenas. Regular follow-up surveys might become necessary to ascertain the course non-Japanese students take upon returning home.

Greater financial aid for non-Japanese students' living expenses
Hearings held by Nippon Keidanren at universities and other surveys indicate that the greatest difficulty in terms of income facing non-Japanese students living in Japan is their inability to receive scholarships, while in terms of expenses, the greatest hardship is the high cost of housing in Japan. As a result, students are unable to make ends meet, let alone study, without a part-time job. Given these conditions, efforts must be made by both public and private institutions to offer more in the way of scholarships.#1

#1 Waseda University, the university with the third largest non-Japanese student body in Japan (approximately 1,600 students in 2003), conducted a survey in 2001 of actual living conditions for non-Japanese students. The survey found that: (1) average monthly expenditures for non-Japanese students totaled roughly 118,000 yen, of which 40% (roughly 48,000 yen) was spent on housing; (2) 70% of non-Japanese students lived in private apartments measuring 10.8 x 5.4 meters, rather than in non-Japanese student dormitories; (3) slightly less than 50% of non-Japanese students received scholarships, while slightly less than 70% worked part-time, approximately 20 hours per week, at a restaurant or other place of business. Based on these conditions, 60% of non-Japanese students were found to be dissatisfied with their current financial situation.

The highest priority must be increasing the number of non-Japanese students granted Japanese Government scholarships. Moreover, the current scheme under which non-Japanese students, once awarded a scholarship, continue to receive assistance regardless of their academic performance, must be revised. A revised framework must be established that would improve the spirit of non-Japanese students by terminating assistance for students with poor academic records, and deporting students who fail to improve their grades after being warned about their poor performance. For the 90% of non-Japanese students who are studying in Japan at their own expense, public scholarships must be supplemented with scholarships provided by private foundations and other groups. It is also necessary for universities themselves to lower course fees for students with excellent academic performance and find additional ways to create an environment in which honors students are able to devote themselves completely to their studies.

With regard to housing, it is important that cheap, quality lodging be made available to non-Japanese students. In addition to universities and nonprofit foundations expanding the accommodations currently available to non-Japanese students, private sector companies could also contribute by providing sections of their employee dormitories to be used as rooms for non-Japanese students.

The Japan Scholarship Foundation, the Association of International Education, Japan, the Center for Domestic and Non-Japanese Students, and other groups plan to merge in April 2004, and the Organization for Financial Assistance for Students will be created to provide scholarships and lodging to non-Japanese students, as well as Japanese students, studying in Japan. For this organization to achieve its goals, it is important that public and private groups work together to provide student assistance.

(2) Promoting Employment of Non-Japanese Students in Japan
1) Employment Trends Among Non-Japanese Students and National Policy

Against the backdrop of globalization, there is a growing trend focusing on employing the best available human resources, regardless of individuals' nationality, even among Japanese companies. Companies are also becoming increasingly aware of the important role that the skills of outstanding non-Japanese students already play in research in many different fields at Japanese universities. An increasing number of non-Japanese students, motivated by the desire to build their careers through work experience in Japan, also seek employment opportunities at Japanese companies.

In response to these trends, the central government is moving proactively to grant permission for a change of visa status for non-Japanese students from student to work visas.#2 But this is rare. The actual number of approved visa status changes in fiscal 2002 was only 3,209 applications out of a total of 3,600 (non-Japanese students that year stood at 95,550). The excessively low number of change of visa status applications in relation to the total number of non-Japanese students, and the fact that the rate of rejection is as high as 11%, are problems that warrant attention.

#2 Although Japanese Government scholarships are granted to non-Japanese students based on the presumption that these students will return home after completing their studies in Japan and work for the development of their home countries, the central government approves employment in Japan for these students under a basic national policy of promoting the acceptance of non-Japanese workers in specialist and technology sectors.
2) Measures for Promoting Employment

The employment of non-Japanese students in Japan is an extremely effective measure for maximizing the contribution of non-Japanese workers in specialist and technology sectors, and employment for non-Japanese students wishing to work in Japan should be aggressively promoted. The following are specific proposals toward this end:

Reevaluating visa status system

  1. Easing standards for visa status changes
    More than a few applications for a change of visa status are rejected on the grounds that the "business" or "occupation" in which the applicant hopes to work differs from the applicant's "field of study" at university. This leads to situations in which non-Japanese, even those with a concrete job offer from a Japanese company, are unable to accept a job because their request for a change of visa status has been rejected on the grounds that the subject they studied at university is different from the business or occupation in which they will be working. If this occurs often enough, companies will come to feel that the series of procedures involved is overly complicated and become reluctant to employ non-Japanese students. Corporate activities today require employees trained not only in humanities and sciences, but also in a variety of other specializations. A formula that strictly demands parity between a student's field of study and the work he or she will be engaged in must be revised, and the standards used in granting permission to change visa status eased.

  2. Establishing a new category of visa status as a bridge between study and work
    Under the current immigration system, non-Japanese students who wish to work in Japan after graduating are forced to choose between returning home and going on to higher education, if they have not received a job offer from a company by the time they graduate from university. Some blame the lack of a visa status category to bridge the gap between the student and work visa for lost job opportunities in Japan.

    A new visa status category should be established to grant non-Japanese students who have graduated with excellent grades from university course in Japan, and for whom the university's non-Japanese student center or other office agrees to act as guarantor, a one-year grace period as a way to bridge the period between graduation from university and the time a decision is made about the student's future career path. Students would be expected to devote themselves to a job search during this one-year grace period, though it could also be used for non-Japanese students to pursue entrepreneurial opportunities on their own. The objection may exist that establishing this new residence status category could contribute to a further erosion of public safety. It is inconceivable, however, that students who have graduated from official university courses with excellent grades would aid or abet criminal activities among non-Japanese, and indeed, may even serve as a deterrent.

  3. Preferential treatment in visa status for non-Japanese with student experience
    In order to promote employment in Japan among those with experience as students in Japan, the central government should study the possibility of granting preferential treatment in terms of the period of stay for work visas to these applicants over other non-Japanese workers.

Assisting with job searches
Many of the non-Japanese students seeking jobs in Japan presume they will receive guidance on employment practices in Japan, be able to find information on the Internet, and have job fairs available to them. Universities, as well as the central government, economic organizations, and NPOs that assist non-Japanese students in finding jobs, must step forward together to establish a network for these activities.

Reforming human resources systems at Japanese companies
Non-Japanese students seeking jobs in Japan say they find it difficult to determine whether promotions and ultimately managerial positions will be available to them at Japanese companies. As soon as they sense that the sphere of promotions are closed to them, career-minded non-Japanese students will choose not to seek employment at Japanese companies. Japanese companies must move to institute comprehensive and pervasive human resource policies that ensure that the best individuals for jobs are employed and receive equal treatment regardless of nationality. It is also imperative that these policies are clearly communicated to those outside of the company, including non-Japanese students.

3. Improvement in Worker Training Programs

(1) Outline of System
1) Basic Framework

The objective of the Training Program and Technical Intern Training Program for Non-Japanese Workers is to train human resources by accepting young workers from developing countries and in Japan for a maximum of three years (one year of general training, two years on-the-job training), over which time they acquire technologies, skills and knowledge they put to use after returning home, thereby contributing to the economic development of their home countries.

In addition to the acceptance by Japanese companies of employees from local associated companies, joint venture companies, and overseas suppliers as trainees (independent company training), since 1990 chambers of commerce and industry, business cooperatives, and other groups have also been able to act as the primary accepting institution for trainees in Japan (collective supervision). In addition to the general training program, the Technical Intern Training Program (TITP) was established in 1993 with the aim of ensuring that trainees who complete the general training and meet the necessary requirements master practical technologies and technical skills by providing them with on-the-job training, and has since become the framework for the current system.

The Japan International Training Cooperation Organization (JITCO) is the central institution involved in supervising the just and smooth operation of these training programs. JITCO was established in 1991 as a public-service corporation under the joint jurisdiction of five Japanese government ministries: Justice; Foreign Affairs; Health, Labor and Welfare; Economy, Trade and Industry; and Land, Infrastructure and Transport.

Although the Training Program and TITP are both implemented to achieve the same objectives described above, trainees and interns are subject to different prerequisites and curricula.

2) Achievement

The number of trainees who have taken advantage of JITCO-administered training and technical intern training programs reached approximately 63,000 in 2002 (roughly 40,000 trainees and some 23,000 applicants to transfer into the technical intern program). Over the past ten years, the number of trainees and interns accepted has increased ten-fold, while the number of (non-corporate) associations acting as the accepting institution for trainees has risen sharply over the past several years. A breakdown by nationality reveals that trainees from China account for nearly 80% of the total accepted, and when Indonesia and Vietnam are included, 96.4% of all accepted trainees come from those three countries. Industrial and occupational breakdowns reveal an overwhelming majority of interns training in the manufacturing industry, with clothing and other textile product manufacturing accounting for approximately half of all manufacturing trainees.

(2) Management Issues and Actions

This year marks a decade since the TITP program was founded. The increasing numbers of trainees accepted and the broad utilization of this system by industry, particularly among manufacturers, indicate that these programs have become firmly established. The ability to secure unskilled labor at low wages, however, is one reason that this program is being utilized by some companies, and possible cases of trainees and interns not being provided positions in which they are able to utilize their acquired skills once they return to their home countries is also a concern. This situation clearly strays from the programs' original intent of transferring technologies to developing countries, and is the most serious problem associated with these programs. Additional problems have emerged in connection with training allowances and wages, as well as the disappearance of trainees. These problems frequently involve associations, brokers and other intermediaries who abuse the Training Program and TITP as a business for dispatching low-wage workers. If not addressed, this issue will evolve to seriously damage Japan's credibility, and an immediate solution to the problem is also necessary from the standpoint of protecting the rights of trainees and interns and safeguarding their working conditions.

In working to resolve these problems, JITCO must work in close cooperation with the government agencies involved to gain a proper understanding of the actual situation on the ground. Based on this understanding, those involved must ensure that both the sending and accepting institutions must thoroughly understand the rules and objectives of these programs, provide the appropriate advice and guidance, and reinforce the activities conducted in the areas of counseling and assistance. Further, it is paramount that a framework be developed to ensure that trainees are appropriately selected by sending institutions, that accepting institutions provide comprehensive education with regard to language, customs and other topics at each stage of the program, and that the well being of trainees and interns is better protected during the training.

The approach taken by cooperative business associations in the textile industry, particularly in Gifu Prefecture, is a valuable resource for developing concrete measures to address these problems. Companies that participate under the umbrella of these collective groups rarely encounter the trouble described above. The associations' approach is a perfect example of how the various problems these programs face can be eliminated through generous self-help efforts and genuine efforts on the part of the accepting institution.

Some have voiced the sentiment that bringing in trainees and interns as low-wage labor through these programs is in fact depriving Japanese of employment opportunities. But it is a fact that domestic advertisements seeking Japanese workers do not attract applicants, leaving many small and medium-sized companies unable to operate without trainees and technical interns. The acceptance of trainees and technical interns from other countries at these companies does not deprive Japanese workers of employment opportunities. On the contrary - bringing in non-Japanese trainees to work with Japanese employees keeps these companies in business, which in turn protects the job of Japanese workers.

As is evident, these training programs have their merits and demerits, and aspects of the system itself are as yet imperfect. We therefore believe that the first step toward improvement must be a genuine effort to respond to the evident problems on the part of those involved with the programs.

The issue of whether Japan should, in the future, accept non-Japanese workers in sectors for which acceptance has not been permitted to date must also be studied. The study should be based on acceptance in these sectors on a trial basis under the programs' framework of systematic acceptance - namely, acceptance of limited numbers of trainees for limited periods of time, clearly defined employment controls, and worker protection. The information gained from the study on the results from the trial and the issues encountered during this phase would be useful in paving the way for full-scale acceptance in these additional sectors. The need for improving training programs, and ensuring their continued utilization in the future, is also evident in relation to a trial study, as well.

(3) Proposals for Program Improvement

Given the needs of the institutions that accept trainees and the countries that send them to Japan, the following proposals are based on the concepts outlined above:

1) Extension of Trainee Period of Stay

The maximum period of stay for those accepted to both the Training Program and TITP is currently a combined total of three years, but demand is strong on the part of both accepting companies and technical interns for this period to be extended to five years. Trainees are valuable assets in the workplace, which is what motivates Japanese companies to call for the extension, and technical interns would like their period of stay extended in order to gain a higher level of technical skills.

For these reasons, we recommend permission for a two-year extension in the intern residence status for technical interns who wish to continue in the program, provided that the interns have passed the Level 3 Technical Skill Proficiency Test and Level 2 Japanese Language Proficiency Test by the end of the second year of TITP training, and that the program is being properly managed by the accepting company.

Granting permission to extend the period of stay for a trainee when these requirements are met would both provide technical training of a higher quality, as well as serve to improve morale for both the accepting companies and the technical interns.

2) Systematic Retraining

While reentry into Japan by former trainees and technical interns who have returned to their home countries after completing the training programs is not prohibited under the Immigration Control Act, trainees are not permitted to return to Japan for retraining directly after they have returned to their home country, nor are they permitted to retrain in the same type of skills or at the same level as during their initial training program. Approval for retraining is granted only when certain basic conditions are met: At least one year must have passed since the trainee has returned to his or her home country and original position; the trainee is to acquire technologies, skills, expertise, and know-how at the controller/supervisor level or the equivalent during retraining; and the retraining objectives and curricula otherwise be of a level higher than the original training program. In addition to these basic requirements, the Minister of Justice grants permission for retraining only when deemed warranted by compelling and specific personal reasons. In practice, trainees accepted at independent corporate entities have been granted permission for partial retraining, although permission for retraining is almost never granted to trainees accepted under the collective supervision of chambers of commerce and industry or cooperative business associations. A number of companies, however, wish to accept the prime candidates from among their former trainees and technical interns for additional training. More than a few former trainees and technical interns, as well, would like to follow up with their training by learning the skills and know-how needed to work as a production line controller.

The standards applied in granting permission for retraining should therefore be clarified and systematized. Adopting the extension of trainee and intern periods of stay as proposed above while allowing two-year extensions in intern status for technical interns, provided the interns have passed the Level 3 Technical Skill Proficiency Test and Level 2 Japanese Language Proficiency Test by the end of the second year of training, and provided that the accepting company is properly managing its Training Program and TITP, would allow for more rigorous application of these standards.

Some have also called for allowing former trainees and interns to enter Japan on Technician visa status, and authorizing employment as regular workers at Japanese companies. While it is recommended that the system move in that direction in the future, it is necessary to accumulate expertise under the current system before attempting to modify the system itself.

3) Introduction of Early Deportation System

One possibility for guaranteeing that training programs fulfill their objective of transferring technologies and skills is the introduction of a system under which training is discontinued prior to the end of the program, and the trainee or intern deported when an instance of inappropriate conduct in a training program is discovered.

Specific instances of inappropriate conduct in a training program would include programs for which the training conduct differs widely from planned curricula, instances in which the living situations or behavior of trainees or interns is called into question, or the inability of technical interns to obtain the appropriate qualifications "requisite" to completing the program, namely attaining a skill level comparable to the Level 1 Basic Technical Skill Proficiency Test over the second year of the training program (The current program "objective" is for trainees to have reached a level comparable to the Level 1 Basic Technical Skill Proficiency Test on completing the first year of training). Establishing mechanisms whereby accepting companies or trainees would be unable to continue training programs under these circumstances is one possible scenario.

4) Broadening Approved Occupations

While approved occupations for training may not involve techniques and skills that trainees would be able to acquire solely through repetition of simple work (unskilled tasks), absolutely no "occupation involving contact with the human body," such as nursing, beauticians, or barbers, is authorized under this system. The majority of the 62 occupations and 113 selective jobs that are officially approved for the technical intern training program (TTTP) involve the manufacturing industry.

However, in addition to the need on the part of a number of other countries to send trainees to acquire skills in nursing and other sectors that are not authorized for the TITP, forecasts also indicate that these sectors will suffer from shortages of Japanese workers in the future. For these reasons, the review of these training programs should push reforms toward a broader range of occupations that trainees are able to engage in.

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