In a position paper entitled "Further Deregulation of the Distribution Industry" released in April 1998 (hereinafter referred to as "April 1998 Position Paper"), Keidanren (Japan Federation of Economic Organizations) supported the recent change in government policy on large-scale retail stores and said that "the repeal of Law Concerning the Adjustment of Retail Business Operations of Large-Scale Retail Stores, a symbol of economic regulation, demonstrates to public, here and abroad, the extent of the progress of deregulation in Japan and will go down in the history of its administrative reform as a big step worthy of special mention." Having said that, Keidanren clarified its basic position on the new system concerning Law Concerning the Measures by Large Scale Retail Stores for Preservation of Living Environment, and pointed out, with reference to the guidelines laid down under Article 4 of Law Concerning the Measures by Large Scale Retail Stores for Preservation of Living Environment on which the government is currently inviting comments from the public, that (the government) should make the guidelines more objective and easier to understand by giving specific numbers "in view of the special character of large-scale retail stores which ordinarily plan their business strategy covering wide areas, and it should reduce the scope of discretionary power of local public bodies (prefectures, etc.) as much as possible so as not to create large differences between the rules instituted by different local public bodies."
In a position paper entitled "Position on Article 4 Guidelines (draft) of Law Concerning the Measures by Large Scale Retail Stores for Preservation of Living Environment" (hereinafter referred to as "Position Paper on Article 4 Guidelines") just released, the government confirmed that the guidelines "define the scope of matters which founders of large-scale retail stores should take into consideration from the legal standpoint" as national standards. In another position paper entitled "Draft Guidelines on Matters Which Founders of Large-Scale Retail Stores Should Consider" (hereinafter referred to as "the Draft Guidelines"), the government specifically defines, by data and formula, matters which founders of large-scale retail stores should consider such as the capacity of their parking lots. Keidanren approves of these approaches in principle, but as regards specific numbers and formulas given in the draft guidelines regarding traffic, noise, and waste disposal, consideration should be given to tailor these requirements to suit real situation and make them economically practicable by hearing the views of founders of, and other persons related to, large-scale retail stores, on whether the requirements are suitable or not, sufficiently on a continuing basis. As regards the implementation of these rules, Keidanren hopes, as the Draft Guidelines says, that regulators see to it that founders of large-scale retail stores be allowed to compute necessary data by other methods by explicitly showing bases of such data such as those of existing stores similar to those they propose to build. And we urge the regulators to take the following points into consideration sufficiently. It is also hoped that drafters of Cabinet Order and Ministerial Ordinance formulate and publish their drafts and invite comments on them as soon as possible to facilitate smooth transition to the new system.
In its Position Paper on Article 4 Guidelines, the government stresses that "the idea of restricting the establishment of large-scale retail stores on grounds that they are detrimental to the commercial interest of the existing small retail stores runs counter to the spirit of Law Concerning the Measures by Large Scale Retail Stores for Preservation of Living Environment, and such idea should be excluded not only from the Guidelines but also from its implementation. . . . . . It is important that steps be taken to make local public bodies to thoroughly understand this and that ordinances and plans aimed at restricting commercial activities similar to the existing Law Concerning the Adjustment of Retail Business Operations of Large-Scale Retail Stores should not be tolerated because they are clearly repugnant to the purport of the recent change in policy", and points out that "it is also necessary to impress on local public bodies that they cannot institute provisions which are liable to impose additional burden (so-called "supercharged regulations") on founders of large-scale retail stores."
Keidanren urges the government to take all conceivable steps to make a clean sweep of all ordinances and guidelines at the level of municipalities which are aimed at restricting commercial activities and check the spread of supercharged regulations as soon as possible, so as to banish fears of "the new system becoming a Law Concerning the Adjustment of Retail Business Operations of Large-Scale Retail Stores in a changed guise" as Keidanren had pointed out in its April 1998 Position Paper. Especially, Keidanren urges the Ministry of International Trade and Industry to establish an office which is exclusively charged with the responsibility for overseeing proper implementation of the new system and handling grievances and to vigorously take appropriate measures such as giving advice and recommendations to local public bodies where necessary pursuant to the Local Autonomy Law.
In its April 1998 Position Paper, Keidanren pointed out that as their social obligations, founders of large-scale retail stores "should be aware of the concern about adverse effects their stores might have on the local community environment, and should redouble their efforts to take measures designed to deal with traffic congestion and safety, the problem of parking automotive vehicles and bicycles, noise prevention, waste disposal, etc.." Once again, Keidanren wants to stress the importance of taking these measures as part of their social obligations incumbent upon businesses catering to the needs of consumers and local communities.
However, this does not mean, as the government pointed out in its Position Paper on Article 4 Guidelines, "the imposition of an unlimited burden on large-scale retail stores disregarding economic rationality." "The level of burden which the Guidelines can impose within legal limits should be one that is considered reasonable from the social standpoint." For instance, "the construction of community infrastructure, primarily, is a question to be addressed by the public sector," and excessive burden --, questions often pointed out, such as the installation of traffic signal and broadening the width of access roads -- should not be imposed on founders of large-scale retail stores.
Moreover, as the government pointed out in its Position Paper on Article 4 Guidelines, it is important to reduce the procedural burden borne by founders of large-scale retail stores. Procedural requirements for making minor changes in the layout and other matters of stores, not to speak of the necessity for simplifying and rationalizing reports and notifications to be filed with regulatory agencies, should be reduced as much as possible in conformity with the spirit of administrative reform and deregulation.
The establishment of a large-scale retail store is governed not only by Law Concerning the Measures by Large Scale Retail Stores for Preservation of Living Environment but also construction-related laws (City Planning Act and Building Standard Law, etc.) and business-related laws (Food Sanitation Law and Pharmaceutical Affairs Law, etc.). Therefore, it is necessary, as the government pointed out in its Position Paper on Article 4 Guidelines, to take steps to facilitate the coordination between national and local governments and between different ministries and agencies in order to prevent harmful effects of the vertically-divided administrative practice. Particularly, the urban development permit required by City Planning Act and the authorization of construction required by Building Standard Law should be given in parallel with -- better yet, in advance to -- the permit required by Law Concerning the Measures by Large Scale Retail Stores for Preservation of Living Environment if only to prevent a vacuum that might occur during the transition to Law Concerning the Measures by Large Scale Retail Stores for Preservation of Living Environment. And it is hoped that the Ministry of International Trade and Industry would take the initiative in coordinating the procedures required by different ministries and agencies.
In a Three-Year Deregulation Promotion Program revised by the Cabinet on March 30, 1999, the government reaffirmed its policy of "liberalization of economic activities in principle and the necessary minimum of social regulation" and announced that when it institutes new regulations, "such regulations will be reviewed, including the possibility of their abolishment, in principle, after the elapse of a certain period." In its Position Paper on Article 4 Guidelines, the government took the position that "it is advisable to plan a revision of Article 4 Guidelines within five years from the date of their coming into force. "Keidanren urges the government to revise the Guidelines within three years, given rapid changes in the social and economic conditions, and to revise Law Concerning the Measures by Large Scale Retail Stores for Preservation of Living Environment and its enforcement regulations in a similar fashion.
Under Law Concerning the Measures by Large Scale Retail Stores for Preservation of Living Environment, the prefectural government concerned is supposed to present its view to the founder of the proposed large-scale retail store within eight months from the date of receipt of a notification of the establishment or enlargement of a large-scale retail store from such founder, regarding impacts which such store may have on the community environment of the area concerned. In case the prefectural government has no comment to make, it is supposed to notify the founder to that effect. In case the founder of any proposed large-scale retail store who has received a comment from the prefectural government submitted a notification of a change in its plan or a notification of no change in response to such comment, the prefectural government may recommend to the founder of such store within a period not exceeding two months from the date of receipt of such notification to take necessary measures. Keidanren suggests that in order to expedite the procedure concerning Law Concerning the Measures by Large Scale Retail Stores for Preservation of Living Environment, the prefectural government presents its view or give recommendations as soon as possible without waiting for the expiration of the full eight-month or two-month periods. It is hoped that the ministries and agencies act expeditiously if only to prevent a vacuum period from developing during the transition period to the enforcement of Law Concerning the Measures by Large Scale Retail Stores for Preservation of Living Environment.
Moreover, the government should make sure that, as provided in the law, such recommendations are limited to "cases where seriously adverse impacts, which a large-scale retail store established in an area may generate on the community environment of such area, prove to be difficult to avert," and "recommendations given should not threaten to place unreasonable burden on the founder and to unduly injure the interest of the founder who has submitted such notification." Keidanren wishes to reemphasize, as pointed out in April 1998 Position Paper, that if any prefectural government gives any recommendation which runs counter to the purport of the law stated above and publishes the fact of non-compliance on the side of the founder with the aim of applying social sanction against the founder of any large-scale retail store, such action threatens to overstep the purport of Administrative Procedure Law.