October 12, 1995
In a recent consumer study conducted by Keidanren, we found that the overwhelming majority of respondents also thought that regulatory reform serves to revitalize the economy and regulation should be kept to a minimum, whenever possible.
The regulatory reform sub-committee of the government's Administrative Reform Committee has taken up the forty-six major policy issues and these items are expected to work as supplement for weak points of the above program.
The government program states that the program will be revised every year based upon the result of surveillance of the Administrative Reform Committee by receiving opinions and requests from concerned parties in Japan and foreign countries. We expect that revising system functions effectively and recommendation to sufficiently expand the program to trigger structural economic reform.
Keidanren proposed the relaxation of 456 items for the program November 17, 1994 and a little less than a half of these items has been included into the program in somewhat ways. At the time of this revision, we request that the items, which have not been adopted last year, be incorporated and the items, which have been adopted but not effectively be further relaxed. We are asking now to add new items such as follows.
The principle to revise the program is stipulated in the program itself and we expect that the rules listed below will be obeyed with regard to economic regulations:
Second, there is an urgent need for reforms that promote fair competition, if the benefits of regulatory reform are to be shared equally and if we are to avoid the danger of regulatory reform resulting in the "law of the jungle" becoming the norm in business. This may include the strict enforcement of anti-monopoly laws (AML) to promote fair and free competition.
The need to reform our laws regulating competition is especially acute. An across-the board abolition, including accelerating abolition of cartels exempted from AML based on the separate laws should be undertaken. As well, we recommend a review of policies governing cartels based on the Law Concerning Exemptions, with an eye toward its abolition. We also expect that there will be a review of the Fair Competition Rules, which are a defacto impediment to competition.
Third, we need to complete administrative reforms on both the national and regional levels. Especially, we expect that local governments will adhere closely to the spirit as well as the letter of federal laws by restraining enactment of any local legislation that enacts additions to federal law. We also expect that local governments will honor the spirit of the Regulatory Reform Action Program and undertake a fundamental review of their local laws. In addition, to ensure fairness and openness in local government administration and operation, we advocate early adoption of local administrative procedure laws to assist in implementation of the Administrative Procedure Law.
Second, we expect the Committee to actively provide information to the public. Popular support is essential if the Committee is to fulfill its mandate, and we fully expect the Committee to periodically make public its findings. In these reports, the Committee should widely publicize, using an easily understandable format, the intent of the reform and the steps taken for each individual regulatory reform measure. We hope that the Committee will make thorough efforts to clearly explain the costs and benefits of regulatory reform, using specific economic indicators.
Third, we expect the Committee to not only monitor the implementation of specific items, but also to ensure that there has been strict observance of past Cabinet decisions on regulatory reform. For example, the Regulatory Reform Action Program stipulates that a review clause should be incorporated in principle whenever a new legal regulation is being adopted. We hope that the Committee observe and evaluate compliance with these decisions and publicize its findings.
The second task of the private sector is to secure transparency and to stop improper business practices. Keidanren has asked reviews of business practices of member corporations and organizations. In our consumer research, we have also found reports of many abuses from cartel-type institutions. We place a great deal of weight on these finding and should firmly address these opaque practices and institutional restrictions on competition. Correction of business practice will lead society to a deeper, and more solid understanding of and trust in the business community and its activities.
The third responsibility of the private sector is to demonstrate its dynamic and creative entrepreneurial spirit in applying the benefits of regulatory reform to the creation of new industries and businesses. At Keidanren, we recently requested that our members earnestly employ the positive results of regulatory reform, and we will continue to urge members to put the "fruits" of regulatory reform to good use.