[ Nippon Keidanren ] [ Policy ]

Second Set of Recommendations on Accepting Non-Japanese Workers


March 20, 2007

Nippon Keidanren
(Japan Business Federation)

I. Introduction

In its opinion paper, "Recommendations on Accepting Non-Japanese Workers," released in April 2004, Nippon Keidanren recommended that the Japanese government take advantage of the diversified sense of values, experiences and skills of workers from other countries to increase Japan's capacity to create added value. #1 The Recommendations proposed specific measures regarding facilitating the acceptance of non-Japanese workers in specialized and technical fields and in sectors where future labor shortages in Japan are anticipated, enhancing the Industrial Training Program and the Technical Internship Program, and improving the living conditions of non-Japanese workers in Japan based on three principles guiding the admission of foreign workers:

  1. Exert sufficient control over the quality and quantity of those admitted;
  2. Ensure respect for their human rights and prohibit discrimination;
  3. Ensure benefits for both Japan and the countries from which the workers come.

Since the release of the first set of Recommendations, certain changes have occurred: new admission frameworks have been established as a result of Japan's promotion of Economic Partnership Agreements (EPA) with other Asian countries, and there is now greater demand among Japan's domestic industries for highly skilled human resources, especially technical personnel. Nippon Keidanren therefore considered problems that governments and local communities in Japan should resolve on a priority basis in order to deal with these changes, and also examined the enhancement of compliance systems within corporations hiring foreign workers. The result of that study is this second set of recommendations.

II. Overview

1. The need for Japan to admit more foreign workers

Japanese corporations are faced with a pressing need to acquire human resources from around the world, because they need to energize their organizations and increase their international competitiveness through the addition of a variety of sense of values and thought patterns. In addition, it is predicted that, in the future, Japan will not have enough skilled personnel in such sectors as nursing, care giving, agriculture, manufacturing, construction and machine assembly. It is therefore essential that Japan admit more foreign workers, a goal that can be achieved through deregulation.

2. Recent initiatives of Japan's national government and ruling party

  1. Guidelines Regarding Foreign Workers: An interim report from the ruling Liberal Democratic Party
    In the July 2006 interim report named here, the Liberal Democratic Party's Special Committee on Foreign Workers discussed: (a) extending the term of residence for highly skilled workers; (b) expanding the scope of "Skilled Labor" status of residence; (c) systematizing programs offering further training; and (d) fundamentally revising controls over alien registration and residence status. These measures should be taken.

  2. Economic Partnership Agreements (EPAs) with other Asian countries
    It is also important for Japan to continue admitting non-Japanese workers by using schemes under an EPA similar to that promoting the admission of nurses and caregivers under the Japan-Philippines EPA.

  3. Commitments under the WTO General Agreement on Trade in Services
    Japan's June 2005 submission of its revised offer on liberalizing the movement of natural persons added commitments for the categories "Engineer," "Specialist in Humanities/International Services" and "Skilled Labor," in addition to its previous commitments regarding intra-company transferees and independent service suppliers. However, the revised offer only makes international commitments for the existing system. Full-fledged commitments accompanied by amendments to Japanese laws will be required.

3. Improvements in Japan's social infrastructure, to promote the admission of non-Japanese workers #2

  1. Clarification of the respective responsibilities of governments and the private sector
    In light of the current situation, the Japanese government needs to change its basic policies on the admission of non-Japanese people, and relevant ministries and agencies should work together to improve their policy formation systems while strengthening ties with local governments. Local governments should enhance Japanese-language teaching programs, promote further education opportunities for the children of non-Japanese workers, and help improve the living environment for them. For their part, companies employing non-Japanese workers need to strengthen their compliance systems to ensure, for example, that they abide by the Labour Standards Act, and to provide assistance for the livelihood of non-Japanese residents. Governments and the private sector should each fulfill their respective responsibilities and establish admission and control systems that can be easily understood from the perspective of other countries.

  2. Accurately understanding labor market needs; admission controls
    Immigration controls need to be applied through a transparent, reliable system which is bolstered by clearly stated, widely known standards that form the basis of immigration and residence status decisions. One approach would be to regulate the number of non-Japanese workers in sectors requiring skilled workers using a labor market test.

  3. Enhanced control of residence status and labor
    It is important to link the alien registration system with the basic resident register system, since this would help local governments obtain a better understanding of circumstances surrounding residence of non-Japanese people and make it possible for them to more accurately provide services to these residents. As a labor control measure, the current Report on Foreign Workers should be modified to prevent illegal labor practices and to promote participation in social insurance programs.

  4. Ensuring benefits for both Japan and the countries from where workers come
    It is important that the admission of non-Japanese workers benefit both Japan and the countries from where they come, and this can be achieved in part by clearly identifying through bilateral agreements the responsibilities of the workers' native countries, and by offering technical guidance and Japanese-language education in those countries through Japan's Official Development Assistance programs.

III. Specific Recommendations

1. Admission of highly skilled human resources; intra-company and intra-group transfers

  1. Admission of highly skilled human resources
    To ensure a sufficient supply of highly skilled non-Japanese workers, the requirement of a minimum of 10 years of practical experience to qualify for "Specialist in Humanities/International Services" and "Engineer" status of residence should be eased as soon as possible. In addition, the system should be modified to permit non-Japanese workers to be accepted for a long period of time under a contractual agreement among companies, without the necessity of a direct employment contract signed by the hiring company and the non-Japanese worker.

  2. Intra-company and intra-group transfers
    The requirement of a minimum one year of practical experience to qualify for "Intra-company Transferee" status of residence should be eased. Many restrictions apply to the "Precollege Student" status of residence for transferees whose main purpose is language learning, but in such cases the "Intra-company Transferee" status of residence, or a similar status, should be granted.

2. Admission of non-Japanese workers for sectors lacking sufficient human resources

  1. Nurses and caregivers
    Now that an agreement has been reached on admission of nurses and caregivers under the Japan-Philippines EPA, the admission of such human resources from Indonesia, Thailand and other countries should be achieved as soon as possible through EPAs with those countries. In addition, current status of residence requirements should be eased to open Japan's doors to nurses and caregivers even from countries with which Japan does not have an EPA.

  2. Skilled workers for manufacturing and other sectors
    In order to eliminate the current and future chronic shortage of skilled workers in such sectors as manufacturing, construction and machine assembly, the Japanese government should consider admitting non-Japanese workers who meet requirements such as knowledge of a certain level of Japanese, conditional upon the introduction of a labor market test. For the immediate future, their admission should be promoted through arrangements under bilateral agreements, including EPAs, while ensuring tight control over their quality and quantity.

3. The Industrial Training Program and Technical Internship Program

  1. Stable implementation of training programs
    In order to ensure stable implementation of the Industrial Training Program and the Technical Internship Program,#3 it is important to enhance compliance systems within the organizations and corporations employing non-Japanese workers, and to monitor admission conditions. In addition, the Ministry of Justice should revise its February 1999 guidelines on immigration and status of residence controls for those participating in the Industrial Training Program and Technical Internship Program, and severe penalties should be imposed on illegal actions.

  2. Institutionalization of programs offering further training
    For those who have received on-the-job training and wish to further improve their skills, readmission for practical training for a two-year period should be permitted, conditional upon trainees having achieved a certain level of expertise in the Japanese language and work skills, and upon having provisionally returned to their home country.

4. Terms of residence; application for a Certificate of Eligibility

  1. Extension of terms of residence
    The maximum term of residence granted for each relevant residence status should be extended from three to five years, with the exception of cases where the term is not fixed, and it should be permitted to select the term of residence, up to the five-year maximum, depending upon the kind of work the foreign worker is engaged in.

  2. Simplification of the application procedure for a Certificate of Eligibility; greater transparency of procedures
    It should be possible to make applications online, and the time required for standard processing should be shortened. Furthermore, a company group's subsidiary that is responsible for personnel affairs at the hiring corporation should be permitted to submit applications as a proxy. In addition, procedures should be simplified for proxy applications by corporations with a good record in employing non-Japanese workers in the past. It is also important to improve procedural transparency by, for example, categorizing cases in which a certificate would not be granted, and stating the reason when it is not granted.

5. Residence and labor controls; support for living in Japan

  1. Residence controls
    A new Basic Register for Non-Japanese Residents should be established to provide the basis for authenticating matters relating to their places of abode and for facilitating the provision of government services.

  2. Labor controls
    The Report on Foreign Workers should be fundamentally modified to require employers to report on non-Japanese workers' nationalities, statuses of residence, terms of residence and employment patterns, and this information should be used for immigration control purposes, to know where non-Japanese personnel are working and to ensure they participate in social insurance programs.

  3. Inclusion of non-Japanese workers within the social insurance system
    To promote the inclusion of non-Japanese workers in Japan's pension and health insurance programs, the system providing for the lump sum repayment of pension contributions to non-Japanese withdrawing from the Japanese pension system should be revised, and consideration should be given to measures permitting the reimbursement of the total personal contribution portion of social insurance premiums. In addition, social insurance agreements should be signed to provide for the avoidance of double payment of pension contributions and social insurance premiums.

  4. Living expense assistance for non-Japanese residents
    There is a need for private enterprises, local governments, international exchange associations, non-profit organizations and other entities to work together to successfully address such issues as finding housing, Japanese language teaching, and education for the children of non-Japanese workers. Furthermore, a study should be conducted into the establishment of schemes for the disbursement of funds in each region by the national government and local governments, with private companies also contributing on a voluntary basis, to provide the financial assistance some non-Japanese workers may require for their livelihood.

  1. #1 Japan's population has started to decline, but Nippon Keidanren's aim in calling for Japan to admit more non-Japanese workers is not to fill the gap caused by this drop in population. According to forecasts, if nothing is done to reverse the depopulation trend, the retirement of the so-called baby boom generation will, 10 years from now, leave Japan's labor force with four million fewer workers. It would not be practical to cover this shortfall entirely through the admission of non-Japanese people. Nippon Keidanren's basic position is that non-Japanese people should be admitted to introduce different cultural ideas and sense of values into Japanese society and corporations and to promote the creation of new added value, as this would accelerate innovation, one of the three factors implicit in a potential growth rate (the other two being labor and capital).

  2. #2 The number of foreigners registered in Japan reached more than 2 million in 2005. Although there has been a decline in the number of so-called "old-comers," primarily South Korean nationals, the number of foreign nationals of Japanese descent, especially from Brazil and Peru, is now rising, and the number of foreigners working in specialized and technical fields, whose admission is being promoted nationwide by Japan, is slowly but gradually increasing as well. Even so, the number of all of these represents only about 1.5% of Japan's total population, which is certainly not high when one considers the country as a whole. However, foreigners of Japanese descent tend to congregate in certain cities and regions, and some areas are experiencing social problems as a result. In this section, Nippon Keidanren's recommendations call for four measures to improve Japan's social infrastructure in ways that promote the acceptance of non-Japanese people.

  3. #3 The Industrial Training Program and Technical Internship Program are for people from abroad who are admitted to work in Japanese firms for a certain period of time in order to acquire the industrial techniques, skills and knowledge practiced in a developed country. The programs are designed to satisfy the need of primarily developing countries for trained human resources who will one day drive their national economic development and promote their industries. The Industrial Training Program helps trainees acquire Japan's industrial and occupational techniques, skills and knowledge within one year (under the "Trainee" status of residence.) The Technical Internship Program offers, during employment, more practical and effective proficiency in the techniques, skills and knowledge for a maximum of two years (under the "Designated Activities" status of residence.)

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