February 6, 1995
(Japan Federation of Economic Organizations)

The Great Hanshin Earthquake is a truly shocking tragedy, causing unspeakable pain and suffering. The only bright spots have been the sight of affected citizens calmly and constructively setting their sights on reconstruction and the warmth of generous assistance from all over Japan and throughout the world.

The earthquake exposed the vulnerability of large cities that expanded so fast during Japan's period of rapid growth. There are certainly many lessons to be learned. These regard strengthening the government emergency management system, building a disaster-proof city and preventing over-concentration of population. However, the immediate priority is to establish an infrastructure of basic housing, essential supplies, utilities and transportation.

To secure the necessary financial resources and ensure that adequate funds are available to local governments for rehabilitation and rebuilding projects, the national government must immediately use reserve funds from this year's budget to quickly compile and pass an appropriate supplementary budget.

To give citizens of the devastated area a goal as well as courage and hope, information (outline, schedule, etc.) about the various rehabilitation and rebuilding measures should be communicated rapidly and thoroughly. Special legislation and other measures should be used as soon as possible to create a rebuilding plan that includes land redistricting and urban redevelopment and is backed by government funding.

Considering the extent of the earthquake's impact, the government should take every possible step in a wide range of areas, including redistribution of budgetary allocations from less urgent projects, to produce the funds necessary for assistance to the victims (financial and tax measures, etc.), give fiscal support to local governments (increasing the amount of special fiscal funds for disasters, etc.), rehabilitate the utilities and transport infrastructure, build temporary housing, remove debris, and undertake other restoration projects. If such steps are insufficient there should be no hesitation to issue government bonds.

In any case the relevant ministries, local governments and private organizations must work together to implement concerted and thorough rehabilitation and reconstruction measures. To meet quickly and effectively the many requirements of those affected, this process must have a dynamism that allows decisions to be made by local authorities and immediately moved to implementation. This will only be possible by a significant transfer of authority to the local governments and other responsible entities. To accomplish this, close contact will have to be maintained between Hyogo Prefecture and the various municipalities.

From this standpoint, Keidanren has prepared the following summary of measures on which the national and local governments should focus current* efforts and areas in which the private sector should support the rehabilitation and rebuilding process. Relief activities involving companies and the entire country are already under way, but it is earnestly hoped that the effort will continue and even be redoubled by everyone feeling the pain of this awful disaster as their own.

(* Even during preparation of this document rapid progress has been made to address some of the points covered)

  1. Facilitation of Relief Activities
    1. Securing Transportation
      Volunteer groups have set up a base of operations providing relief in Nishinomiya city and other areas, but served land routes make it difficult to penetrate west of Ashiya. The utmost efforts are essential to open transportation routes as soon as possible.

    2. Strengthening Cooperation between Government Bodies, Companies and Private Volunteers
      Many of the needs of the earthquake victims cannot be met by government entities alone. Use of volunteers, company expertise and materials and other resources should be strongly encouraged.
      A volunteer counter has been set up at each local city emergency headquarters, from which volunteers are helping to distribute goods and perform other tasks. However, there are also volunteer groups in local areas capable of meeting a wide variety of needs. A separate headquarters for liaison and cooperation with these groups should be established to strengthen relief activities.

  2. Improvement of Housing and Basic Necessities
    1. In order for public and private entities and local residents to cooperate efficiently on restoration projects, it is best that temporary housing and other short-term housing facilities for the affected be prepared in areas outside of the restoration projects.
      Given the scale and severity of this disaster, not only the local governments of the stricken areas but also those of relatively unaffected surrounding areas should play an active role in building temporary housing for at least a minimum of privacy and protection from the rain and cold. In this process it is essential to provide affected citizens with sufficient information, both interim and final, on schedules, procedures and other details.
      Also, the utmost effort should be made to ensure that pubic housing in surrounding areas and available space in public buildings is fully utilized.
      As electricity, gas, water and other utilities are restored there will be an increase in daily garbage and waste water. Measures for proper removal and treatment of such waste must guarantee an acceptable level of public hygiene in the affected areas. The national and local governments need to promptly implement such measures.

    2. Keidanren is speaking to its member companies about the possibility of providing or leasing land for the construction of temporary housing. Additionally, it is discussing with housing developers, owners of company accommodation and other members in the surrounding areas the feasibility of making dwelling space available.

  3. Rebuilding Medical Care Organizations and Providing Mental Care
    1. The capabilities of local medial care organizations must be restored as soon as possible not only to care for the people injured in the earthquake but also to combat influenza and chronic health conditions requiring regular treatment. The national and local governments must give priority to restoring water supplies and other essential utilities to these organizations, repairing public and private medical care facilities, supplying medicines, medical equipment, beds and other items as well as assigning mobile medial care vehicles to areas where restoration efforts lag.
      Adequate attention must also be paid to expanding the number of professional medial personnel available in the stricken area.

    2. Keidanren is asking member companies involved in the manufacture of medical equipment, pharmaceuticals and other medical items to give priority to supplies for affected areas.

  4. Prompt Rehabilitation of Main Roads, Railways, Harbor Facilities, etc., and Establishment of Alternate Routes
    1. To return the lives of residents to normal and facilitate the transportation of materials for restoration projects, the top priority is fast progress in rehabilitation of main roads, railways, harbor facilities (including public and private wharves) and other transportation infrastructure. The national government should take forthright fiscal measures, including provision of interest-free loan to organizations in charge of these projects and construction subsidies for restoration projects.
      The national government should also implement bold fiscal measures to enable emergency capital investments by national transportation (rail, harbor, etc.) bodies to establish alternate routes and expand capacity in the nationwide physical distribution system.
      Local governments must also encourage individuals to minimize use of personal vehicles in the affected and surrounding areas in order to facilitate the overall reconstruction process.

    2. In light of the sever damage of both public and private wharves in Kobe's main port and surrounding port areas, which hinders transport of raw materials and other goods, Keidanren is asking member companies with private wharves in surrounding cities to partially open up these facilities for use by affected companies.
      Keidanren is also asking member companies to assist in supporting alternate transportation routes, by pooling vehicles and other equipment and by coordinating centralized emergency distribution facilities.

  5. Stabilizing Daily Life, Rehabilitation of Business Facilities and Resumption of Business Activities
    1. To promote the stabilization of daily life and preparations to reopen local commercial and industrial business, the national and local governments should create a system for long-term, no-collateral loans at no interest or extremely low interest rates, support the extension of repayment schedules for existing loans, expedite procedures for loans and other financing at city bank counters and expand reductions and exemptions from national and local taxes.
      To stabilize employment in the affected areas, it is necessary to take special measures that expand the applicability of employment adjustment subsidies, increase the share of salary paid and extend the period for which employment insurance is paid.
      Local governments should establish temporary factories and offices to enable small businesses whose factories or offices were lost to resume business. The national government should provide the necessary fiscal support for these projects.

    2. Keidanren is requesting that financial-sector members quickly determine the circumstances of affected customers and assume a flexible posture on extension of long-term, low-interest, uncollateralized loans and the handling of existing liabilities.

  6. Restoration of Commercial and Distribution Capabilities in Affected Areas
    1. To promote the speedy recovery of local commerce and distribution, the national and local governments should establish spaces for local retailers and others to hold bazaars and set up temporary stores. Bazaars should include a counter for local government representatives and volunteer groups (a general consultation center) which responds flexibly to the manifold needs for affected individuals.
      It is also important that public and private entities monitor pricing to ensure that prices remain stable and prevent unfair price increases.

    2. Keidanren has asked member companies to support the efforts of local businesses by providing necessary equipment and materials for a bazaar and cooperate with the distribution, storage and pricing of goods.

  7. Normalization of Compulsory Education Environment
    1. Based on the prerequisite of prompt construction of temporary housing, the national and local governments must takes steps to normalize the compulsory education system by returning schools currently used as shelters to their original functions, repairing school buildings and supplying them with equipment, furniture and teaching materials.

    2. Keidanren is asking member companies to help provide building materials, machinery, equipment, furniture and educational materials.

  8. Removal of Damaged Buildings and Debris
    1. The national and local governments should responsibly proceed with the removal of damaged or burned-out buildings that impede the urban rehabilitation process or pose danger, and with handling the large amounts of debris involved.
      The handling of debris is a particularly important issue as it will have a significant impact on the pace of redevelopment. Local governments should stay in close contact with each other to determine a fundamental policy on methods of removal, disposal sites and other matters as soon as possible.
      The local governments should utilize the expertise and personnel of private organizations to promptly survey all buildings in the stricken areas and determine whether or not they are usable.

    2. Keidanren is asking member companies to assist wit know-how and advice concerning various methods of building debris disposal, to supply removal equipment and to cooperate in the process of determining whether buildings can be used.

  9. Promoting Land Redistricting and Municipal Land Redevelopment Operations
    1. Great damage was caused by fires in areas where dwellings and shops were densely crowded and by the collapse of architectural structures in residential areas, office districts and shopping districts. Therefore, to advance the recovery of municipal areas, there is a need to start urban planning from scratch in areas affected by the disaster, by creating public facilities in an integrated manner through redistricting and municipal land redevelopment operations.
      However, the situation varies in different parts of the affected area, and with only the current framework a smooth recovery cannot be achieved in all of them. To advance restoration and proceed with urban planning to withstand future disasters, the central and local governments should heed experts in such areas as architecture, civil engineering, urban planning and urban disaster prevention to create a new restoration system. There must be bold conversions of land usage and promotion of diverse municipal recovery operations based on new concepts.
      As an interim measure, after clearly explaining outlines of regional disaster prevention plans and municipal redevelopment plans to those affected, the government must strengthen those parts of the Basic Architecture Law that apply in times of disaster. One important aim is to balance individual property rights with the priorities of redistricting and redevelopment operations. Profits from land transfers that support this aim should be exempted from taxation.
      Assistance should be provided through the tax system using such measures as expanding the house acquisition promotion system (purchase or rent) and reducing the real estate acquisition tax, registration and licensing tax and fixed assets tax.
      In addition, as a special measure to subsidize interest payments by people affected by the disaster who make use of long-term financing, the government should utilize municipal land recovery funds provided through private-sector financial institutions.

    2. Keidanren will request member corporations to positively assist in the creation of plans and the introduction of ultra-long-term financing, and to provide capital cooperation to the primary organizations established in the recovery plans of the regions affected.

  10. Assistance for People Living in Shared-Ownership Apartment Buildings
    1. Covering the costs and gaining a consensus for repairing or rebuilding shared-ownership apartment buildings damaged by the earthquake's vibrations, ground liquefaction or fire is a major problem. Although it will be difficult, in fairness, to offer special public assistance only to people living in shared-ownership apartment buildings, local governments should be actively involved in helping to resolve differences between various apartment owners to promote rebuilding of safe, attractive, pleasant structures as an integral part of urban rehabilitation and fire prevention plans.
      The national and local governments should also take measures that will encourage apartment building owners to rebuild, such as the establishment of long-term, extremely low interest financing, relaxed building volume-to-lot ratios and coverage ratios and inclusion in land redistricting projects.
      Further, measures should adequately deal with the requirements of affected people living in rented homes or apartment as well as those wishing to rent.

    2. Keidanren is asking member companies to actively present plans for high-quality housing at low cost that minimize the capital burden on existing owners. It is also requesting that members in the financial industry quickly determine the circumstances facing affected people and take a flexible stance on implementation of long-term, low-interest, uncollateralized loans and on existing liabilities.

  11. Tax and Financial Assistance for the Rehabilitation of Industrial Facilities and Businesses
    1. To ensure employment in the stricken areas have jobs and to normalize the daily living infrastructure it is important that both manufacturing and non-manufacturing (such as commercial, financial and transportation) facilities be rehabilitated and that businesses reopen as soon as possible. While there is no doubt that priority should be given to assisting affected individuals, it is essential that tax and financial assistance be provided to businesses to facilitate a quick recovery of economic activities. First, measures should e taken to provide reductions and exemptions from land tax, fixed-asset and other taxes for a certain period. As a tax relief measure, businesses should be allowed to record outlays necessitated by the disaster as actual losses, special tax measures should be applied to capital investments in factories, office buildings and other business facilities in the stricken areas. Tax reductions and exemptions should also apply to the sale of assets by affected businesses so they can secure capital for rehabilitation.
      Special tax measures should also be considered for business owners who provide welfare for affected employees.
      In the area of financing, a system of long-term, extremely low interest loans through both the national and local governments should be established. These measures should include extension of the loan period and deferment period, flexibility in collateral evaluation and extension of repayment schedules for existing liabilities.

    2. Keidanren is working with local economic organizations to develop a system of support and cooperation for affected companies that transcends industry barriers in order to expedite the rehabilitation of industrial facilities.

  12. Assistance for Providers of Electricity, Gas and Communications Services in the Stricken Areas
  13. Considering the massive amounts of capital required by electricity, gas and communications providers to restore normal services, the national government should consider long-term, extremely low-interest loans and assistance through liability guarantees for loans from private financial organizations and the issuance of corporate bonds.

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