| Related organization Report |
Disclosure and Deregulation (Tokyo American Center - June 27, 1997) Jean Heilman Grier Senior Counsel for Trade Agreements U.S. Department of Commerce Washington, D.C. 20230 Tel : 202/428-3215 Fax : 202/428-4076 E-mail : jgrier@doc.gov |
| Talking Points Deregulation has a prominent place in the U.S.-Japan bilateral trade agenda. Recently, at the G-7 Summit, Prime Minister Hashimoto and President Clinton announced the initiation of an " Enhanced Initiative on Deregulation and Competition Policy " under the 1993 U.S.-Japan Economic Framework. The Enhanced Initiative singles out four sectors initially for talks in expert -level groups -housing, medical devices / pharmaceuticals, financial services and telecommunications. The Initiative will also cover two sets of cross-sectoral structural issues : competition policy and distribution, and transparency and other government practices. The inclusion of issues related to transparency and other government practices in the Enhanced Initiative is a recognition that reform of administrative procedures and practices is an essential complement of deregulation. For years, the United States has been calling for increased transparency and information disclosure in Japan. A primary concern has been that U.S. firms do not have the same access to information and the administrative system in Japan, as Japanese firms enjoy in the United States. This lack of access also affects many Japanese firms. The U.S. governmental system contrasts sharply with Japan's system in terms of its openness and transparency. A vast amount of information may be obtained from the U.S. Government by foreign and domestic firms alike. Moreover, there are numerous access points for firms doing business in the United States, including access to Congress and the executive branch, as well as to the courts. A more transparent and accessible administrative process in Japan would reduce the need for U.S. firms to seek the assistance of the U.S. government in addressing problems that arise in the Japanese administrative system. There are five areas of primary concern involving transparency and other government practices : (1) the rulemaking process; (2) advisory councils ; (3) information disclosure ; (4) administrative guidance ; and (5) industry associations. Rulemaking Process in Japan A central concern with the administrative process in Japan involves the lack of transparency in the preparation of regulations. Because Japanese laws tend to be of a general nature with the details delegated to cabinet orders (seirei), ministerial ordinances (shorei) and other regulations, the bureaucracy is given substantial discretion in their implementation. Japanese ministries and agencies are under no obligation to inform the public of their plans to adopt or amend regulations or to allow for public participation in the process. Instead, ministries and agencies are able to develop regulations in a "black box," to which only insiders such as domestic industry associations and former bureaucrats have access. This non-transparent process disadvantages companies that do not have access to information about regulations that are being developed by ministries and agencies. Rulemaking Process in U.S. In contrast to the non-transparent process in Japan, the U.S. Administrative Procedure Act (APA) establishes an open and transparent rulemaking process. The APA requires agencies that intend to adopt or modify a regulation to publish a notice in the Federal Register (comparable to Japan's Kanpo) of their plans and to invite all interested parties to submit comments on the proposed regulation. The notice must include the proposed rule or a description of it and the legal authority for the proposed rule. An agency must allow all interested parties to submit written comments on the proposed rule or offer alternative approaches. Finally, an agency must take the comments into consideration when it prepare the final rule. The rulemaking requirements ensure that those parties most interested, and who are often the best informed, regarding the proposed regulation are able to provide information to the agency. This process allows agencies to benefit from the experience and input of interested parties because governments do not always have the best answers. The courts plays an important role in ensuring that agencies follow the rulemaking procedures. Advisory Councils (Singikai) in Japan A second aspect of the administrative system that raises transparency concerns is the use of advisory councils (shingikai) and similar informal groups, including kenkyukai and kondankai, to prepare reports and recommendations on new policies. An overall concern is that shingikai often serve as rudder-stamps for ministries and agencies, cloaking a non-transparent, bureaucracy-led, decision-making process in an aura of independence and impartiality. Ministeries control shingikai in a number of ways, including through appointing numbers who will support the ministry's position, providing the information considered by the shingikai, guiding shingikai deliberations to support recommendations fovored by the ministry and supplying the secretariat staff to draft the reports of the shingikai. Other concerns focus on the lack of transparency surrounding the singikai process. Despite a September 1995 Cabinet Decision that was aimed at increasing the transparency of shingikai process remain largely non-transparent. A number of the councils do not give public notice of thier meeting and many refuse to disclose the minutes of their meetings and the information provided to the council members by the ministry. In addition, much of the work of shingikai is conducted behind closed doors. Advisory Committees in United States In contrast to the Japanese council system, advisory committees in the United States are subject to much more stringent requirements. The 1972 Federal Advisory Committee Act (FACA) sets out a number of requirements for advisory committees, including the following : (1) Committee membership must be fairly balanced in terms of points of view represented; (2) Committees must publish a notice of each meeting in the Federal Register prior to the meeting:; (3) All committee meetings must be open to the public, subject to certain exceptions; and (4) Committees must keep records of all meetings and make the records available to the public for inspection. Information Disclosure Law The ability of the public to obtain a wide range of government information upon request is critical element in making an administrative system transparent. To date, the Japanese central government has adopted an information disclosure law, even though both the United States and domestic interests have been calling for the enactment of such a law for years. The Japanese Government now appears poised to enact an information disclosure law, based on a report submitted to the Prime Minister in December 1996 by the Administrative Reform Committee (Gyousei Kaikaku Iinkai). The government is preparing the legislation for submission to the Diet by March 31, 1998. The form and content of the final legislation shuold be of concern to the public. The effectiveness of the law will depend on whether it covers all administrative bodies, requires information to be released unless it meets narrowly defined exemptions, and substantially limits the discretion of bureaucrats to refuse to release requested information. It is also essential that the courts be able to effectively monitor compliance with the law. The enactment of an effective information disclosure law would provide an important tool for the public to gain access to government information. United States The public in the United States has the right to obtain federal government information under the Freedom of Information Act (FOIA). Under FOIA,an agency must provide information requested by a member of the public, unless the information meets certain limited exceptions. When agencies refuse to provide information, the person seeking the information may ask the courts to review the agency's refusal to determine whether it is consistent with the law. Administrative Guidance Another concern regarding the lack of transparency in Japan relates to the use of administrative guidance (gyosei shidou ), which some estimate constitutes more than 80 percent of administrative activity in Japan. Given the extensive role that the use of administrative guidance plays in the regulatory process, the process of developing administrative guidance should be opend to public scrutiny. The 1994 Administrative Procedure Law (APL) imposed, for the first time, some disciplines on administrative guidance, by requiring, inter alia, that it be put into writing in two cases : (1) when it is issued to two or more persons ; and (2) when the recipient of oral guidance asks that it be put in writing. However, there is a concern that parties receiving oral administrative guidance are reluctant to request that it be put into writing for fear of antagonizing the ministry or agency issuing the guidance. The use of administrative guidance should be subject to greater transparency. For example, it shoud be subject to prior notice or public scrutiny of the intended use of administrative guidance. Industry Associations Another facet of the Japanese administrative system that raises concerns involves the delegation of quasi-governmental regulatory functions to industry associations. The types of activities undertaken by industry associations include the development of industry standards, product certifications and entry authorizations. Although they carry out a quasi-governmrntal regulatory function, there is a lack of transparency in delegations to industry associations, as well as in the process that the associations use in carrying out their delegated responsibilities. These are some of the concerns that the United States is looking forward to discussing with the Japanese Government in the coming months under the Enhanced initiative in an effort to encourage Japan to make its administrative processes more transparent and accessible. A more open and transparent system would benefit both domestic and foreign parties. |